Although declaring bankruptcy is not an easy and safe decision for an individual, sometimes it becomes necessary to secure the borrower’s future. Thus, the decision might seem huge, but it is suitable for the situation. If the debt becomes unmanageable, declaring bankruptcy can save the borrower from a tiring and lengthy legal procedure. However, after declaring bankruptcy, the borrower can think about the future to make a fresh start to enhance the credit history.
In that situation, investing a good amount of resources in purchasing a car is a wise decision for upgrading the credit score. However, if you are in the same boat, a question might bother you whether it is possible to purchase a car after declaring bankruptcy. So, you can buy your dream car after declaring bankruptcy, as many dealers are ready to sell the vehicle to an individual with poor credit history.
However, the option differs in each case based on the borrower’s bankruptcy type, the tenure of filing the case, and the reason for purchasing the car. If it seems confusing to you, the below points will provide clarity regarding buying a vehicle after filing for bankruptcy.
Can I purchase a car after filing for bankruptcy?
The car loan lenders or the dealers of automobiles generally do not feature any specific rules for bankrupt car purchasers. Thus, if you have declared bankruptcy in the past, it should not affect the purchasing procedure of the vehicle or prevent you from buying an automobile effectively.
However, in some cases, the car dealers can treat the buyers with a bankruptcy history depending on the factors, such as the bankruptcy reason and the cause for purchasing the vehicle. Since filing for bankruptcy affects the credit history and the credit score adversely, the car leaders or the lenders can impose high interest-rate in the case of bankrupt car buyers.
Although the negative impact of the credit report can make the car purchasing procedure difficult for the bankrupt individual, filing for bankruptcy does not prevent an individual from buying the vehicle.
Is there any waiting period to purchase a car after filing for bankruptcy?
Generally, there is no such waiting period to purchase a car after declaring bankruptcy. However, a person needs to be aware that the terms and conditions of the loan or the purchasing procedure might not be the same for them.
Since your credit history gets affected massively due to bankruptcy, auto dealers can increase the interest rate for this reason. However, if you purchase a vehicle after a few years, the credit score rebuilds. So, the customers even get suggestions to utilize consumer credit accounts and improve their credit history after filing for bankruptcy.
End thought Filing bankruptcy influences an individual credit report adversely; the person can purchase a car even after filing bankruptcy. However, sometimes car dealers or loan lenders can impose high interest rates due to the poor credit score of the person. You can also consult a bankruptcy lawyer to get advice on this topic.